Virgin Atlantic recently celebrated the 40th anniversary of its first flight. Since its founding, it has endured more than its fair share of growing pains, financial challenges, and underhanded tactics from its biggest rivals. Today, it is one of the United Kingdom’s flag carriers with an instantly recognizable livery and is renowned for its innovative approach.
But how did Virgin Atlantic come to be? A missed flight and a bright idea According to Sir Richard Branson , its founder, it all started when a flight that he was booked on was canceled last minute. Branson famously chartered an aircraft and sold tickets to all the passengers who had been bumped. And he says it got him thinking .
“This led to a big ‘what if...
’ moment. I traveled a lot, watching and signing bands and doing deals (for Virgin Records). Traveling by plane wasn’t fun.
It was awful. Tickets were expensive, service was terrible, the food was worse, and there was no competition to push the airlines to do anything about it. I realized there was a gap in the market.
What if we did something different and gave passengers a great experience.” The opportunity to “do something different” would come along much sooner than expected. A gap in the market Laker Airways pioneered low-cost flights across the Atlantic with its McDonnell Douglas DC-10 Skytrains in the late 1970s.
But by 1982, it had collapsed under the weight of over $300 million in debt. The airline's former chief pilot, Capt. Alan Hellary, subsequently proposed the concept of a new, all-economy airline called British Atlantic Airways to fill the gap in the market and was looking for investors.
From stardom to bankruptcy, this is the story of Freddie Laker's Skytrain. Branson heard about it and agreed to bankroll the operation on the condition that it be called Virgin Atlantic Airways instead. Furthermore, he wisely sought out the council of former Laker Airways founder Sir Freddie Laker and received two pieces of crucial advice.
The first was that an all-economy model was a far higher risk. Branson took this advice to heart, as Virgin Atlantic would go on to pioneer the three-class model. The second piece of advice was that British Airways (BA) would come for the new competitor, just like it had with Laker Airways, and he should be prepared to “sue the bastards!” Those words would prove to be very prophetic.
Acquiring an aircraft In February 1984, Branson, Hellary, and Fields held a press conference announcing the launch of Virgin Atlantic, and now the race was on to obtain an aircraft in time for the busy summer season. Branson recalls those first negotiations with Boeing: “I got on the phone with Boeing, and they were amused to hear an Englishman from the music business asking what kinds of deals were available on a jumbo jet. They told me that Boeing did lease aircraft and had a second-hand jumbo they would seriously consider taking back after a year if things didn’t work out.
” Virgin Atlantic's first aircraft was a second-hand Boeing 747-200 (registration G-VIRG) that had originally been delivered to Aerolineas Argentina. It was christened the Maiden Voyager and given the now-familiar Virgin Atlantic livery in preparation for a June 1984 launch. While acquired on a one-year lease, given the uncertainty of starting a new airline, it ultimately remained in the Virgin Atlantic fleet until the early 2000s.
Setting up operations It was also full-steam ahead on setting up the operations to support the fledgling airline. Aside from what Branson describes as “endless waves” of legal, financial, and commercial aviation licensing issues, the airline made several important decisions in these early days: Base: The London Air Traffic Distribution Rules (TDRs) prevented it from operating at London Heathrow (LHR) , so it was decided to operate from London Gatwick (LGW) with flights to Newark (EWR). Ticketing: The airline set up a ticketing system in record time, which included the innovative approach of selling tickets through its trendy Virgin Record stores.
Aircraft configuration: Some highly innovative decisions in these early days saw Virgin Atlantic become the first airline to configure its aircraft with a 3-class layout that included premium economy, as well as introduce seat-back screens for entertainment. Maintenance: With just a single aircraft, maintenance needs weren’t onerous, but Virgin Atlantic arranged for competitor British Caledonian to service the aircraft. Marketing: Virgin Atlantic leveraged Branson's flamboyant personality to great effect, obtaining a huge amount of free PR from his interviews and publicity stunts, which were instrumental in raising the new airline's visibility.
On June 22, 1984, Virgin Atlantic Airways Flight VS1 departed from LGW for EWR, the airline's first flight. It carried Virgin Group employees, numerous celebrities and media, and 70 cases of Champagne for what was described as an “eight-hour party in the sky.” The fight to survive The airline was profitable in its first year and quickly set about acquiring additional Boeing 747s to start scheduled services to Miami (MIA), New York (JFK), Tokyo Narita (NRT), Los Angeles (LAX), Boston (BOS) and Orlando (MCO).
But the big expansion point came in 1991 when Virgin Atlantic was permitted to operate from London Heathrow following the abolition of the TDRs. Aside from allowing it to enter one of the largest global aviation markets, the UK Civil Aviation Authority also transferred two pairs of unused landing slots that BA held at Tokyo Narita to Virgin Atlantic. This put Virgin Atlantic firmly in the crosshairs for BA, which initiated what would become known as the “Dirty Tricks” scandal.
It conducted several activities that included: Attempting to hack Virgin Atlantic systems to gain access to insider information on its flights. Accessing passenger records and then impersonating Virgin Atlantic employees and calling its customers to try to get them to switch their flights to BA by offering upgrades or suggesting that the Virgin Atlantic flights were canceled. Releasing a dossier of false claims about Virgin Atlantic's business to fuel negative stories in the press.
Hiring private investigators to search the trash of Virgin Atlantic staff and journalists who had spoken to Branson. Branson famously sued BA for libel in the High Court, and as the details of the nefarious activities emerged, BA chose to settle to case. It was ordered to issue a public apology and pay Virgin Atlantic over $5.
5 million in penalties and legal fees, which at the time was the largest libel settlement in British legal history. Branson distributed the funds to Virgin Atlantic staff as a “BA Bonus.” From strength to strength Virgin Atlantic emerged stronger from these early years and grew steadily.
Singapore Airlines bought a 49% stake in the airline, which was later purchased by Delta Air Lines in 2012. The two airlines formed a joint venture partnership, and Virgin Atlantic ultimately joined the Sky Team Alliance. Virgin Atlantic also replaced its Boeing 747-200s with newer Boeing 747-400s and Airbus A340s in the 2000s, and subsequently with more efficient twin-jets.
Today, the airline flies to 32 destinations with a fleet of 44 aircraft comprising Airbus A350-1000s, A330-300s and -900s, and Boeing 787-9s..
